by Jackie Kafka, TimeForge Marketing Associate
Sales forecasting is a crucial part of any business, especially if it involves inventory and products. That being said, you may not realize just how important it is or how many things it can be applied to. For example, you probably know it directly affects operations, but did you know it can affect marketing plans as well?
For new businesses it can be hard to figure out where to start when it comes to sales forecasting – there simply is no sales history to refer to. In this case, businesses should do extensive research to determine which numbers will be used in their forecasting. For example, what is the number of sales that similar businesses have during a certain time range? Make sure it relates to the right geographic region and that the target market is taken into consideration.
For businesses that already have the data, sales forecasting can affect many aspects of the company, according to tutor2u.net. Operations are determined by sales forecasting: who should be working and when? How should you be building shifts based off the sales forecast? What kind of plans of action should be created? Production is determined by sales forecasting: should more or less of a product be produced during a certain time period? Is more inventory needed? And yes, marketing is determined by sales forecasting: should marketing efforts be increased because a rise in sales is anticipated?
So much is affected by sales forecasting that it is important to keep up-to-date information. Most companies create an annual forecast and an annual plan of action, but that plan of action should be reevaluated and adjusted as new sales forecasting data comes in. If there is time, sales forecasting should be reevaluated several times a month. When reevaluating data and plans, it is a good idea to bring in people from the various departments that are affected by sales forecasts, according to INC.com. This makes sure they are more likely to trust the data and to stick to the plan created.
Having a plan-of-action based off sales forecasting is crucial for keeping a business in the black. It should be continuously readjusted to take into account new data and keep a company on the right track. By doing so, a business can create a plan to prosper and continue to be successful.
If you have questions about TimeForge or how our products interact with Sales Forecasts, please contact us!